Positive credit reporting and how it will benefit your credit score

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Towards the end of last year, the Australian Government announced that, come July 1, 2018, it will be introducing mandated comprehensive credit reporting (CCR) for all financial institutions throughout Australia.
What is comprehensive credit reporting, you ask? Well, basically it is a new positive credit reporting system that will make it easier for financial lenders to make a balanced assessment of a borrower’s credit score and history. In a nutshell, it refers to additional information being provided to, and held by, Credit Reporting Bodies in Australia. Good information, rather than just the bad marks we’re used to.

This new system is not only beneficial for lenders, but for consumers as well – here’s why.

CCR will make it easier for consumers with a negative credit score to apply for loans and credit cards. Currently, most lenders and other financial institutions are only reporting the black marks on consumers’ credit files which generally indicates that they are unreliable borrowers.

Positive credit reporting will allow financial institutions to look past an applicant’s credit score and further into their financial background. It basically means that all consumers will be given the benefit of the doubt when it comes to their borrowing history. They won’t be turned away at the door, bad credit score in hand. They’ll be welcomed into the building and given a much fairer chance.

As a lender, we really do want to help people. It is not our aim to be declining customers, however, it is common practice for lenders to set stricter criteria for consumers with a negative credit score. However, CCR will allow us to have access to more detailed information on the applicant’s history. We will be able to look at when a consumer has opened or closed a credit account, the type of credit they have applied for in the past and their repayment history for the last 24 months. Further, we’ll be able to report on positive information like clients paying off their loans on time.

This information will allow us to make more accurate assumptions of an applicant’s eligibility, giving them a fairer chance. We understand how easy it can be to miss a payment or make a couple of late ones and we don’t believe that this should hinder a person’s eligibility for seeking financial help in the future.

If you have a negative credit score but have been making a conscious effort to repair it by maintaining regular payments, it will be much easier for you to apply for a loan. However, if you are someone who only has a little bit of debt and a positive credit score but you have been failing to maintain regular payments, lenders will take this into consideration when processing your application.

Over to you

Comprehensive credit reporting is a fair system that will allow for more accurate communication between lenders and financial institutions and their clients. So, now we’d like to hand it over to you guys to see if you have any questions about CCR that we could answer for you. Otherwise, we would love to hear your opinions on what comprehensive credit reporting might mean for you.

How customers rate Jacaranda

Positive credit reporting and how it will benefit your credit score Overall rating: 4.8 out of 5 based on 58 reviews.

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Fast & Safe Loans

Small Personal Loan

Loan Amount

Minimum
$300


Maximum
$2,000

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Terms

Minimum
12 Months


Maximum
12 Months

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Costs

Up to 20% Establishment Fee
+ monthly fee up to 4%

Jacaranda Finance does not charge an annual interest rate on SACC loans. These small amount loans incur 'fees' instead of interest. The maximum comparison rate on our loans between $300 and $2000 is 199.43%.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
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Examples

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Loan Amount of $1,000 over 12 months repayable weekly (50 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $480 (fees based on 4% per month over 50 weeks) = $1,680 total repayable in 50 weekly installments of $33.60.

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Medium Personal Loan

Loan Amount

Minimum
$2,100


Maximum
$4,600

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Terms

Minimum
13 Months


Maximum
24 Months

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Costs

Annual Percentage Rate (APR) is 48%
Comparison Rate is 67.41% per annum.

This comparison rate is based on a medium amount credit contract of $2,500 repaid over 2 years with a $400 establishment fee and APR of 48%.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
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Examples

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principle Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest*) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

Loan Amount of $4,500 over 24 months repayable weekly (104 weekly repayments). $4,500 (Principle Amount) + $400 (Establishment Fee) + $2,732.56 (reducing interest*) = $7,632.56 total repayable over 24 months with weekly installments of $73.39.

* Reducing intertest means that the 48% APR is applied to the outstanding balance on a loan. When a loan repayment is made, the loans outstanding balance goes down and the APR is applied to that lower balance. Therefore, the interest component of the loan will constantly reduce (as long as repayments are being made!) - thus it is called reducing interest.
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Large Personal Loan

Loan Amount

Minimum
$5,000


Maximum
$10,000

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Terms

Minimum
13 Months


Maximum
24 Months

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Costs

Annual Percentage Rate (APR) is 21.24%
Comparison rate is 48% per annum.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
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Examples

Loan Amount of $5,000 over 18 months repayable weekly (78 weekly repayments). $5,000 (Principle Amount) + $2,027.80 (Interest) = $7,027.80 total repayable over 18 months with weekly installments of $90.10.

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principle Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

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